Break-even ROAS Calculator
Estimate the break-even ROAS based on contribution margin assumptions.
Break-even ROAS is the minimum ROAS required to avoid losing money on variable economics (COGS and other variable costs).
Use it as a floor. Your target ROAS should usually be higher to cover overhead, uncertainty, and desired profit.
Prefer an explanation- Read the guide.
Break-even ROAS: how to calculate it (and set a target ROAS)Paid ads funnel: CPM, CTR, CVR -> CPC, CPA, ROAS (with profit)Marginal ROAS: how to scale ads with diminishing returnsMER (blended ROAS): how to use it without fooling yourself
Your product gross margin before marketing (COGS only).
%
Card/processing fees as % of revenue (optional).
%
As % of revenue (optional).
%
As % of revenue (optional).
%
$
Used to translate break-even ROAS into CPC/CPA targets.
%
Tip: you can type commas (e.g., 10,000).
Example
Using the default inputs, the result is:
1.75x
- Gross margin
- 60%
- Payment fees
- 3%
- Shipping & fulfillment
- 0%
- Returns & refunds
- 0%
- Average order value (AOV) (optional)
- $80
- Conversion rate (CVR) (optional)
- 2.5%
How to calculate
- Enter gross margin (COGS only).
- Add variable cost percentages that scale with revenue (fees, shipping, returns).
- Compute contribution margin and break-even ROAS = 1 / contribution margin.
- Compare your current ROAS to break-even to see if spend is structurally profitable.
Formula
Break-even ROAS = 1 / (Contribution margin)
- This is a simplified contribution-margin model (not a full P&L).
- All inputs are expressed as a percent of revenue and are additive.
Benchmarks
- If contribution margin is 40%, break-even ROAS is 2.5x (1 / 0.40).
- If break-even ROAS is very high, fix unit economics (margin/fees/returns) before scaling spend.
- Use consistent net revenue (after refunds) when evaluating profitability.
FAQ
Is break-even ROAS the same as target ROAS-
No. Break-even ROAS is the minimum ROAS to avoid losses on variable economics. Target ROAS should be higher to cover fixed costs and desired profit.
Should I include fixed costs in break-even ROAS-
Not in this simplified model. Fixed costs are better handled by setting a higher target ROAS or by modeling contribution profit needed to cover fixed costs.
Common mistakes
- Treating break-even ROAS as a scaling target (it is a floor, not a goal).
- Omitting variable costs that scale with revenue (fees, fulfillment, refunds).
- Mixing time windows or attribution models when comparing to platform ROAS.
How to interpret
How to use break-even ROAS
- Use contribution margin, not net margin.
- Add payment fees, shipping, and returns if they scale with revenue.
- Treat this as a floor; set a higher target ROAS for growth.
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Quick checks
- Keep attribution model and window consistent when comparing campaigns.
- Pair efficiency metrics (ROAS/CPA) with profit assumptions (margin, refunds, fees).
- Validate tracking after site changes (pixels/events can silently break).